ANDERSON, J.: The South
Carolina Department of Motor Vehicles (“DMV”) appeals the order of the Administrative Law Court (“ALC”) reversing the DMV’s denial of an application for a
Self-Insurance Certificate. The DMV contends the applicant did not satisfy the
requirements established in S.C. Code Ann. § 56-9-60. We affirm.

FACTUAL/PROCEDURAL
BACKGROUND

The
Original Blue Ribbon Taxi Cab Corporation (“Blue Ribbon”) operates a fleet of
taxi cabs in South Carolina and has been in operation for over seventy years.
Blue Ribbon originally insured its vehicles with policies from various
insurance carriers. However, due to soaring policy rates, Blue Ribbon sought
and obtained a Self-Insurance Certificate from the DMV. In order to meet the
requirements of a self-insurer, Blue Ribbon maintained a segregated claims
account to pay judgments entered against it, relying on a letter of credit from
the Sumter National Bank (“Bank”). The DMV accepted the letter of credit as
complying with the statutory prerequisites.

On
November 14, 2005, Blue Ribbon and the Bank renewed and amended the irrevocable
letter of credit to limit claims to the minimum automobile insurance policy
limits enacted by the General Assembly. In February 2006, the DMV denied Blue
Ribbon’s renewal application for the Self-Insurance Certificate in response to
the new limitations provided for in the letter of credit. Blue Ribbon
contested the decision before a DMV Senior Hearing Officer. In his order
affirming the denial, the Senior Hearing Officer expounded:

I conclude that the DMV was not
satisfied that the Letter of Credit submitted by the Petitioner showed ability
to satisfy any judgment against it. I conclude that this decision was in the
discretion of DMV as afforded by Section 56-9-60, that the decision was not
unreasonable and that it did not contradict state law.

Blue Ribbon further appealed to the Administrative Law Court. The ALC judge issued an order enunciating:

I conclude that the Department’s
decision to deny Blue Ribbon’s application warrants reversal. The Department’s
decision is premised on the assumption that the legislature intended for
self-insurers to provide greater protection to the public than statutory
liability policies provide. However, the Department’s assumption is at odds
with the way in which our Supreme Court has interpreted legislative intent with
respect to the self-insurer statute.

. . .

Furthermore, if the Department were able
to deny self-insurer status in any case where it was dissatisfied that the
applicant was able to pay any judgment that might be entered against it,
then the Department could deny virtually all applications for self-insurer
certification. Few, if any, South Carolina companies seeking self-insurer
certification can show that they are able to satisfy any potential
adverse judgment, no matter how large.

(emphasis
in original). The ALC judge concluded Blue Ribbon had complied with the
statutory requirements for self-insurer status and reversed the decision of the
DMV.

ISSUE

Did
the Administrative Law Court err in reversing the South Carolina Department of
Motor Vehicles’ denial of Blue Ribbon’s application for a Self-Insurance
Certificate under S.C. Code Ann. § 56-9-60?

The review of the administrative law
judge’s order must be confined to the record. The reviewing tribunal may
affirm the decision or remand the case for further proceedings; or it may reverse
or modify the decision if the substantive rights of the petitioner has been
prejudiced because of the finding, conclusion, or decision is:

(a) in violation of constitutional or
statutory provisions;

(b) in excess of the statutory authority
of the agency;

(c) made upon unlawful procedure;

(d) affected by other error of law;

(e) clearly erroneous in view of the
reliable, probative, and substantial evidence on the whole record; or

(f) arbitrary or capricious or
characterized by abuse of discretion or clearly unwarranted exercise of
discretion.

S.C.
Code Ann. § 1-23-610(C) (Supp. 2007).

The
decision of the Administrative Law Court should not be overturned unless it is
unsupported by substantial evidence or controlled by some error of law. Olson,
379 S.C. at 63, 663 S.E.2d at 501 (“[T]his court can reverse the ALC if the
findings are affected by error of law, are not supported by substantial
evidence, or are characterized by abuse of discretion or clearly unwarranted
exercise of discretion.”); see S.C. Code Ann. § 1-23-610(C). The ALC
judge’s order should be affirmed if supported by substantial evidence in the
record. SeeWhitworth v. Window World, Inc., 377 S.C. 637, 640,
661 S.E.2d 333, 335 (2008); Houston v. Deloach & Deloach, 378
S.C. 543, 550, 663 S.E.2d 85, 88 (Ct. App. 2008); McGriff v. Worsley Cos.,
Inc., 376 S.C. 103, 109, 654 S.E.2d 856, 859 (Ct. App. 2007). “However,
the reviewing court may reverse or modify the decision of the ALC judge if the
finding, conclusion, or decision reached is ‘clearly erroneous in view of the
reliable, probative, and substantial evidence on the whole record’ or is
affected by an error of law.” S.C. Coastal Conservation League v. S.C.
Dep’t of Health & Envtl. Control, Op. No. 4450 (S.C. Ct. App. filed Oct.
23, 2008) (Shearouse Adv. Sh. No. 40 at 71) (citing Olson, 379 S.C. at 63,
663 S.E.2d at 501; S.C. Code Ann. § 1-23-610(C)(d)-(e)); see alsoSGM-Moonglo,
Inc. v. S.C. Dep’t of Revenue, 378 S.C. 293, 295, 662 S.E.2d 487, 488 (Ct.
App. 2008) (“The court of appeals may reverse or modify the decision only if
the appellant’s substantive rights have been prejudiced because the decision is
clearly erroneous in light of the reliable and substantial evidence on the
whole record, arbitrary or otherwise characterized by an abuse of discretion,
or affected by other error of law.”)).

(A) A person or company who has more
than twenty-five motor vehicles registered in his name may qualify as a
self-insurer provided that the department is satisfied that the person or
company is able to pay any judgments obtained against the person or company.
Upon not less than ten days’ notice and a hearing pursuant to notice, the
department may cancel self-insurer status when the requirements for the status
no longer are met. The person or company must submit the following information
to the department for it to determine financial responsibility:

(1) a copy of the applicant’s latest financial
statement prepared by a certified public accountant licensed to do business in South Carolina, indicating that the applicant has a positive net worth;

(2) a current list of all vehicles
registered in applicant’s name;

(3) the applicant’s procedural
guidelines for processing claims; and

(4) the applicant must have a net worth
of at least twenty million dollars or the department may require the applicant
to deposit in a segregated self-insured claims account the sum of three
thousand dollars for each vehicle to be covered by the self-insurer’s
certificate. Eighty
percent must be cash or an irrevocable letter of credit issued by a bank
chartered in this State or a member bank of the federal reserve system, and the
remaining twenty percent may be satisfied by the “quick sale” appraised value
of real estate located in the State, as certified by a licensed appraiser. The
three thousand dollar a vehicle amount may not decrease more than thirty
percent in any given certificate year.

S.C.
Code Ann. § 56-9-60(A) (Supp. 2007) (emphasis added).

The
central issue in the case at bar is whether Blue Ribbon met the statutory
requirements to receive self-insurance status as required by the applicable
law. The DMV does not contest Blue Ribbon complied with the requirements of
the statute except for a single provision. The dispute centers on whether the
limitations placed on Blue Ribbon’s letter of credit constitute a failure to
comply with Section 56-9-60(A)(4).

The overall purpose of the
[self-insurance statute] is to assure protection for the public for injuries
and damages growing out of the negligent operation of motor vehicles on the
roads of this State.

. . .

We think it was the intention of the
legislature that a self-insurer provide the same protection to the public that
a statutory liability policy provides. A self-insurer substitutes for an
insurance policy to the extent of the statutory policy requirements.

Under South Carolina law, however, a
company that has more than twenty-five motor vehicles registered in its name
may be a self-insurer upon satisfying the statutory requirements. As a
self-insurer, North Area Taxi, was required to provide the same minimum
protections to the public as the minimum limits required by a statutory
liability policy. Technically, a self-insurer is not an insurer at all;
rather, a self-insurer provides a substitute for an insurance policy.

Juxtaposing
the case law precedent and the plain language of Section 56-9-60, we find Blue
Ribbon properly complied with the requirements for self-insurance status and
affirm the decision of the ALC. Our courts have consistently held
self-insurers are required to provide a substitute for an insurance policy to
the extent of the statutory policy requirements. SeeSouthern Home
Ins., 268 S.C. at 477, 234 S.E.2d at 872. Blue Ribbon complied with the
requirements established by Section 56-9-60(A) and provided a segregated claims
account in the form of a letter of credit containing the per vehicle sum mandated
by the statute. The limiting language added to the letter of credit merely
serves to ensure Blue Ribbon’s substitute for a policy conforms to the
statutory policy requirements ensconced in S.C. Code Ann. § 38-77-140 (Supp.
2007) (Currently, minimum statutory policy limits are set at twenty-five
thousand dollars for bodily injury to a single person in a single accident,
fifty thousand dollars for bodily injury to two or more people in a single
accident, and twenty-five thousand dollars for property damage resulting from a
single accident. This statute has been amended subsequent to the drafting of
the letter of credit addressed in this case).

The
plain language of Section 56-9-60(A) requires the applicant to prove to the
department that “the person or company is able to pay any judgments obtained . . . .” (emphasis added). However, the determination of what constitutes
the ability to pay any judgment is derived from the statute as a whole and the
relevant case law. Our courts have concluded the legislature intended for
self-insurers to conform to the statutory policy requirements. A literal
reading of the “any judgments obtained” clause would be inconsistent with case
law precedent and would lead to an absurd result clearly unintended by the
legislature. This interpretation would allow the DMV exceedingly broad discretion
to deny applicants who were unable to satisfy hypothetical judgments far
greater than the statutory policy requirements necessary for other insured
motorists. Therefore, Section 56-9-60 must be interpreted in conjunction with
the minimum statutory policy requirements of Section 38-77-140. We find this
to be the correct figure to look to when determining whether an applicant has
the capacity to satisfy any adverse judgments.

Section
56-9-60 establishes four prongs to be followed by the DMV in determining the
financial responsibility of the company. See S.C. Code Ann. §
56-9-60(A)(1)-(4). Blue Ribbon complied with all of these necessary
qualifications. The limiting language in the letter of credit conformed with
the statutory policy requirements mandated by Section 38-77-140. Therefore,
Blue Ribbon’s letter of credit satisfied all statutory prerequisites and the
application for the Self-Insurance Certificate should have been granted.

CONCLUSION

Based
on the foregoing, the order of the Honorable John D. McLeod, Administrative Law
Judge, is